According to former presidential
candidate Howard Dean: "In order to make capitalism work
for ordinary human beings, you have to have regulation."1 That's the best oxymoron since George Carlin's
"jumbo shrimp." Dean's plan to institute a new federal
regulatory regime to snuff out the "greedy" pharmaceutical
companies, "powerful" utilities, and media "monopolies"2 would not make capitalism work; it would wipe
out private investment and innovation and send the economy into
a nose dive. In the process, regular - and, in many cases, low-income
- human beings would be harmed the most.

Costs of regulations reduce
per capita income which lowers the quality of life for all of
us. Economists Mark Crain and Thomas Hopkins put regulations'
annual cost to the U.S. economy at $843 billion, or eight percent
of the Gross Domestic Product.3
That's $7,700 per household for us ordinary folks.4

But it's the disproportionate
effect regulations have on disadvantaged families that is most
alarming. Regulatory costs, like consumption taxes, consume a
larger portion of the poor's income, leaving fewer resources
for adequate housing, medical care, proper diet and other crucial
needs. Environmental regulations are particularly regressive.
Howard Dean's interest in further regulating the utility industry
and, specifically, requiring 20 percent of power production to
come from renewable sources by 2020 would grossly penalize low-income
Americans who already pay a disproportional share of energy costs.
During the 2000-2001 energy crunch, for example, home energy
costs for the typical consumer equaled 4.6 percent of their income
while for low-income Americans, energy costs amounted to as much
as 19.5 percent.5

Even more disturbing is the
link between some regulations and mortality. Regulations, we
assume, reduce risk, injury and death. Sadly this is not always
the case: some regulations result in loss of life. Harvard economist
W. Kip Viscusi, for example, found a number of years ago that
safety caps on aspirin bottles has resulted in more fatal accidents
than lives saved. As parents place full faith in the safety measure,
they drop their guard, leaving bottles in harm's way or failing
to fasten the top tight enough.6

Federal standards for vehicle
fuel economy - known as "CAFE," for Corporate Average
Fuel Economy - is another example of regulations that result
in more lives lost than saved. Enacted in 1975 during the energy
crisis, CAFE requires automobile manufacturers to make cars that
achieve 27.5 miles per gallon to reduce energy consumption. Manufacturers
meet these standards by building lighter vehicles.

But lighter automobiles do
worse in collisions and place occupants at a much higher risk
than occupants of heavier vehicles. The National Academy of Sciences
reported last year that "the downweighting and downsizing
that occurred in the late 1970s and early 1980s... probably resulted
in an additional 1,300 to 2,600 traffic fatalities" and
advised elected officials to consider the tradeoffs of CAFE regulations.7

Two months ago, the National
Highway Traffic Safety Administration released its own report
on the impact of vehicle weight on safety and found that collision
fatalities resulting from weight reductions are even higher than
previously believed. Accidents with small cars are twice as likely
to result in fatalities as small and midsize SUVs and four times
as likely as minivans.8 Despite
these recent findings, leaders on the left propose raising the
standard for all automobiles to 40 miles per gallon.9

Regulations will continue
to cost human lives as long as regulators fail to consider the
risks created by regulations along with the risks avoided. The
Brookings Institution and the American Enterprise Institute recently
took a look at regulations specifically intended to save lives
and weighed their prevented risks against the unintended risks
- called "risk-risk analysis." In "Do Federal
Regulations Reduce Mortality," the authors found that of
the 24 regulations reviewed, 13 resulted in a net loss of life
by diverting funds away from life-saving investments. The worst
of the reviewed regulations in terms of lives lost were issued
by the EPA - which netted a loss of 98 lives. Of these EPA regulations,
most pertained to reducing exposure to carcinogens.10

Howard Dean and his allies
on the left need to reconsider their commitment to a new regulatory
state. Lives are at stake - both in terms of the economic impact
and the unintended risks such policies would have on all of us
ordinary human beings.

# # #

Dana Joel Gattuso
is a senior fellow of The National Center for Public Policy Research.
Comments may be sent to [email protected].

3 W. Mark Crain and Thomas D. Hopkins, "The Impact
of Regulatory Costs on Small Firms," Report for the Office
of Advocacy, U.S. Small Business Administration, Washington,
D.C., RFP No. SBAHQ-00-R-0027, October 2001, p. 1.

4 "USA Statistics in Brief - Population and Vital
Statistics," U.S. Census Bureau, Washington, D.C., available
at www.census.gov/statab/www/part1.html as of March 23, 2004;
and W. Mark Crain and Thomas D. Hopkins, "The Impact of
Regulatory Costs on Small Firms," Report for the Office
of Advocacy, U.S. Small Business Administration, Washington,
D.C., RFP No. SBAHQ-00-R-0027, October 2001, p. 1.

5 The Cold Facts: The First Annual Report on the Effect
of Home Energy Costs on Low-income Americans, The National Fuel
Funds Network, The National Low-Income Energy Consortium, The
National Energy Assistance Directors' Association, Washington,
D.C., 2001-2002, p. 2.